Party's almost over: Fixed home loan rates start to climb
Although the RBA put rates on ice for Melbourne Cup Day, the party may be over for home buyers and refinancers who have been making the most of record-low home loan rates. Despite the RBA decision to lock the cash rate at 2.5, fixed rate home loans have been inching upwards with more than 10 lenders increasing their fixed rates through October in anticipation of a rate rise.
Rates may be on hold, but according to the latest Mozo data, banks fixed rates are creeping steadily upwards with an average increase of 26 basis points. All four of the major banks have increased rates on fixed term home loans since the start of October, indicating that the interest rate cutting cycle is over and lenders are now beginning to price in an increase to the cash rate.
Among the majors, the largest increases were instituted by ANZ and Westpac. ANZ increasing the 3 year rates by 30bp and Westpac lifting the 5 year rate by 30bp. Commonwealth Bank increased both 4 and 5year rates by a more modest 20bp while NAB increased 3year rates by 20bp and 5 year rates by 24bp.
The largest increases have been on longer term fixed rates while some some lenders are still trying to attract short term fixed loans. 1year fixed rates are still quite low but the 5year rates are climbing fast.
The only providers with rate decreases are smaller lenders and generally only in the vicinity of 10-15bp.
Hesitating refinancers should consider locking in the savings while the still can as the flurry or once in a lifetime low home loan rates could very soon be over.
Refinancers or purchasers looking to lock in a great fixed rate will find there are still some great deals in the market from smaller players.
To see what’s still available in the final round of super-low fixed rate home loans take a look at the fixed rate home loan comparison tables here.